Cisco Systems agreed to buy Acacia Communications for US $2.6 billion in its search for technologies to meet the demand for more robust networks.
The California based company will pay US $70 per share, a 46% premium compared to Monday’s closing price for Acacia, the companies said in a statement on Tuesday. The agreement is expected to close in the second half of Cisco’s fiscal year 2020.
Cisco, whose teams constitute the backbone of the internet and corporate networks, has recently reactivated its growth by renewing products and incorporating new software and services as part of a renewal led by Chief Executive Chuck Robbins.
Among Acacia’s clients, Nokia, Huawei Technologies and ZTE stand out, and Cisco represents about 18% of its revenues, according to a Bloomberg analysis.
Bill Gartner, director of Cisco’s optics division, said the agreement allows companies to more closely integrate their technologies and offer customers simpler solutions.